As Custom Meets Tech, Datamining Cloud Over Digital Gifting

Not one to let any possible sale slip past without clawing in a rupee or two, corporates have shaken off their lassitude as well, using algorithms to decode browsing and purchase history, targeting buyers with tailored goods, offers and schemes. Clearly, the ‘gifter’ — and the ‘gifted’, by extension — have never had it so good.

Tech Footfall Changing World Of Gifting

In a world synced by screens and algorithms, gifting has evolved from thoughtful gestures wrapped in paper to strategic transactions powered by data. At its heart, gifting remains unchanged — an expression of care, appreciation and celebration. The mediums, methods and motivations are shifting tangentially, though.

The process is today not just about selecting something meaningful; it’s about navigating options that are personalised and thrown at your screen, derived from your online history and social media activity.

Worldwide, the US$ 300-billion gifting market is a testament to this evolution, driven by digital transformation and behavioural insights. Says Deloitte: “Gifting is no more a niche but an expectation, with technology being the enabler.” For the tech-inclined, it is also a fascinating confluence of human sentiment and digital wizardry.

Forrester Research says 70 per cent of shoppers are likely to purchase gifts suggested by algorithms. That is making gifting platforms use ‘trend predictions’ to target customers with ‘ideal’ products. There is a caveat, as pointed out by Forrester and McKinsey, that “the value of getting personalisation right — or wrong — is (also) multiplying”. Today, AI is not just selling gifts. It is also shaping our idea of what constitutes and makes for a ‘perfect’ gift.

Digital Innovation In Gifting

Gifting in a digital era is increasingly shaped by algorithms that tailor suggestions based on preferences, past purchases and even subconscious tendencies revealed online. The rise of e-commerce firms has paved the way for hyper-personalisation, with platforms like Amazon, Flipkart, Myntra and Etsy offering curated lists based on user data.

Consider this — you browse for a watch as a gift for a friend. Suddenly, your social media feeds and inbox are flooded with discounts on accessories and complementary items. This is not coincidental at all, it’s algorithmic ingenuity at work. Gartner says by the end of next year, over 80 per cent of gifting will not be self-determined, but will involve AI-driven personalisation, reshaping how people shop and finalise gifting options.

This happened to Ramesh, a 35-year-old Pune resident who was the recipient of an AI-curated gift — a smartwatch. It was not just the item, but the accompanying features tailored to his fitness goals that left Ramesh stunned, yet impressed. The ‘gifter’, his cousin in Chennai, had simply uploaded his preferences on a gifting app, which handled the rest.

Data Mining And Rise Of Targeted Gifting

Gift shops, online and offline, are gobbling up data. They leverage customer data to identify and single out the latest gifting trends, popular occasions and buyer behaviour. This extends beyond retail. Online corporate gifting — already a Rs 12,000-crore industry in India — relies heavily on CRM (customer relationship management) tools to target clients and employees.

The intense datamining to corner a large share of the pie is catalysed by sheer market size. According to Technopak, a leading management consultant, the Indian gifting market was valued in 2022 at around US$ 30 billion (Rs 250,000 crore).

Of this, personal gifting made up US$ 20 billion, followed by festival gifting at US$ 7.5 billion and corporate gifting at US$ 2.5 billion. The sucker punch — the overall market is growing annually at over 200 per cent.

Sure, datamining and its precision come at a price, some of which goes beyond the monetary. Privacy concerns loom, as datamining practices raise questions about ethical boundaries that should not be crossed, but are often being blatantly skimmed over and ignored. 

Personalisation Can Be A Big Nuisance

All the targeting and monitoring of your personal space is no certainty that you will like what AI throws at you. It can also be a nuisance. For instance, knowledge of preferences and recent browsing makes online sellers recommend gifts based on recent purchase activities, ranging from skincare products to organic groceries and whathaveyou.

For instance, young entrepreneur Shruti suddenly found her Instagram feed flooded with ads for artisanal candles, after she purchased a diffuser online. Within days, her social media was abuzz with curated gift hampers featuring eco-friendly wellness products. “It felt like the universe knew my next move,” she says, quite aware that it was an algorithm-driven escapade.

Such instances will only increase with advancing tech. Today’s firms know that smartwatches, fitness trackers and gadgets now dominate wish-lists. That has inspired even the likes of Bose and Apple to create gifting-specific product lines for special occasions. The latest trend is experience-based gifting — virtual reality tours, online masterclasses and digital subscriptions — all of which are seeing exponential growth.

Deloitte Insights identified experiential gifting as a US$ 3-billion market globally in 2023, growing at 12 per cent annually. McKinsey attributed this trend to the millennial and Gen Z preferences for ‘memories over the material’. Digital gifting has made experiences more accessible. For instance, you can now gift a Netflix subscription or a Spotify Premium account using your mobile phone.

Mixed Bag Of Emotions

While technology simplifies the gifting process, it also raises questions about authenticity and effort. Incidents such as the one experienced by Priya, a software engineer, underline this. She gifted her mother a tea set, as suggested by AI, but later felt that it lacked a personal touch. “It was pretty and convenient, but not as meaningful as handpicking something myself,” she admits.

On the other hand, Vinay, a marketing professional, appreciates the efficiency. “I forgot my best friend’s birthday, but managed to send a thoughtful gift through Instamart within hours. It saved the day,” he recalls. Such stories underscore how technology caters to last-minute givers, but may sometimes sideline the deeper sentiments associated with gifting.

Despite its advantages, digital gifting poses challenges and privacy concerns. A 2023 study by Pew Research said 73 per cent of users in the US are uneasy about how companies monitor their online activity and use it to recommend products to them. The corresponding number in India would be in the same vicinity, given browsing and sales trends.

Paradox Of Choice

There’s also the paradox of choice. The sheer number of options offered by online platforms can be overwhelming and lead to decision fatigue. Arvind, a college student, says, “I spent hours scrolling through options for my dad’s birthday gift, and ended up even more confused.”

The simple philosophy is that gifting is all about emotional resonance. Technology, for all its innovation, must complement, not overshadow the human element. To most people, a phone call or a personal touch can mean a lot more than any gift. And while algorithms can predict preferences perfectly, they are not too good to hug or cry with. They also can't replicate the emotional satisfaction of selecting with love something for someone you love.

(The writer is a veteran journalist and communications specialist. Views are personal)